Let's break down the problem step by step using the information from the graph in the image. --- ## Step 1: Identify the Equilibrium **Equilibrium** occurs where the **demand** and **supply** curves intersect. ### From the Graph: - The equilibrium price is where the two lines cross. - From the graph, this occurs at **Price = $10** and **Quantity = 600 units**. --- ## Step 2: Analyze a Price of $18 We're asked to consider what happens if the **price is set at $18**. ### At $18: - **Quantity Supplied:** From the supply curve, at $18, the quantity supplied = **900 units** - **Quantity Demanded:** From the demand curve, at $18, the quantity demanded = **200 units** --- ## Step 3: Calculate Shortage or Surplus - **Surplus** occurs if quantity supplied > quantity demanded. - **Shortage** occurs if quantity demanded > quantity supplied. Here: - **Quantity Supplied (900 units) > Quantity Demanded (200 units)** - So, there is a **surplus**. #### Surplus Amount: \[ \text{Surplus} = \text{Quantity Supplied} - \text{Quantity Demanded} = 900 - 200 = 700 \text{ units} \] --- ## Step 4: Final Answers ### 1. **Equilibrium Price:** $10 per unit ### 2. **Equilibrium Quantity:** 600 units per month ### 3. **At Price $18:** - **Surplus or Shortage?** Surplus - **Amount:** 700 units --- ## **Summary Table** | Scenario | Value | |-----------------------|--------------| | Equilibrium Price | $10 | | Equilibrium Quantity | 600 units | | At Price $18: | | | - Surplus/Shortage | Surplus | | - Amount | 700 units | --- Let me know if you need more details or further explanation!